Electricity customers are coming together to take control of how they use and pay for power. Energy Local clubs, which can be set up as community benefit societies or community interest companies, aim to reduce bills for consumers and connect them with locally owned renewable generators.
With support from Co-operative Energy, groups of customers are using smart meters to measure how much energy they consume and when they consume it. They create ‘smart local energy’, which could revolutionise the relationship between customers, small-scale power generation and suppliers.
Smart meters record the data so customers can be rewarded if they shift energy use away from the peak time of 6pm and coincided use with local renewable production.
Armed with this knowledge, these groups can negotiate a better deal with their supplier.
People have seen power as something big and scary that they don’t understand. When they get involved in an Energy Local club they become more important
A community hydro could be selling power at 5p per kWh to a supplier, who is charging the community 13-14p for it. Neither renewable energy bencoms or similar organisations nor consumers are getting the true benefits.
“People want to keep income local and benefit the panels on their school or church hall. It also helps community cohesion,” says Dr Mary Gillie, founder of Energy Local.
“Many factories already benefit from paying different prices for electricity at different times of the day. But for domestic households, the market is set up assuming customers are using power at 6pm. There’s no way of rewarding you for shifting your power use. We’re addressing this market failure.”
Dr Gillie says communities match usage to when their own generation is operating and pooling the output.
“Customers have been seen as passive. People have seen power as something big and scary that they don’t understand. When they get involved in an Energy Local club they become more important.”
Suppliers also benefit, she says. “The cost of power to a supplier is not at a set rate. It’s cheaper for them to buy when generation is high and demand is low.
“They get charged if they haven’t bought enough power, so if they can understand when demand is highest it helps them plan effectively. They’re penalised if they don’t predict demand accurately.
“If you flatten the curve, they can buy blocks of power in advance.”
This process, known as hedging, enables suppliers to cut costs and reduce bills for consumers. Suppliers would also benefit from increased customer loyalty and better customer satisfaction.
Dr Gillie says matching local usage with local generation would reduce the cost of electricity wires that ultimately ends up on our bills – as curbing the peak of electricity at 6pm would reduce wear and tear.
“There’s also a lot of pressure to connect more renewable generation and small-scale generation,” Dr Gillie says. “Network operators who look after the wires get rewarded for customer satisfaction at being able to connect.”
In time, these Energy Local ‘clubs’ could link electricity customers with local renewable energy producers and empower energy communities to negotiate better prices with energy retailers. Trials are just starting.
For example the Energy Local Club in Watchfield, Shrivenham and Longcot, Oxfordshire, could coincide its usage with production at Westmill Solar Co-operative, which sits near Watchfield on the border of Wiltshire and Oxfordshire.
The project, co-funded by Innovate UK, involves Exergy Devices, Oxford University ECI, De Montfort University, Moixa, Weset and Energise Sussex Coast. It began a year-long trial in 48 households in December 2015.
The households are testing equipment to control electrical devices, in particular storage heaters and water heaters. The controls give households a helping hand in matching local demand with local solar generation and shift electricity usage into low price periods. A display shows usage and the cheap times of day to use power.
The technology runs alongside the household’s normal supply and calculates savings on an Energy Local tariff. It is then paid the value of these savings in Midcounties Co-operative shopping vouchers.
Another trial will be held in Bethesda, Wales, with a local hydro.
- Keep up to date on how these progress at www.energylocal.co.uk